The bashed patch allows some simple mods to be combined together into one plugin, meaning that less plugins are being loaded by Oblivion.
Did you know that you can't enable more than 254 plugins at once.

It also provides numerous small features which can replace entire downloaded mods, some of which are bug fixes and crash preventers (for example the Bow Reach Fix, which prevents a crash caused by improperly configured bows or the Nvidea Fog Fix, which tries to prevent the black-fog-like effect experienced by some Nvidea users). It also allows certain features of mods to be combined together.

Lastly, Wrye Bash provides a number of utilities to repair specific problems in mods and save games. Overall, a very useful tool to have.